Just moderate the greed

There has been so much hemming and hawing over possible remedial measures to cushion the impact of the oil price shocks amid the worsening tensions in the Middle East (ME). Official statements from Malacañang Palace all the way to Congress have been spewing urgent calls advocating to cut, if not suspend, the collection of excise taxes on imported crude oil.

And the other populist proposed remedy is to waive the 12 percent value added tax (VAT) on the sale of gasoline, diesel and other refined crude oil products. The same proposal gets a strong push from public transport groups like jeepney drivers and operators pressing for at least P2 fare increase effective immediately. They have been groaning over the more than P1 per liter price increases long before the ME conflict erupted.

Global prices of crude oil already breached $110 per barrel following the supply disruption of shipments from the strife-torn ME. Now entering its second week, the military attacks and counter attacks between the United States-Israel against Iran since Feb. 28 expanded to other parts of the oil-producing Gulf states.

At a press conference on March 3, President Ferdinand “Bongbong” Marcos Jr. (PBBM) disclosed he is eyeing “special powers” from Congress to lower excise tax on fuel to cushion the impact on consumer prices due the escalating global tension. “So, I will discuss it with the leadership of Congress to see if it’s going to be an emergency measure. It is not going to be a permanent measure. It will be something that we will dispose of as soon as the crisis is over,” PBBM cited.

Last Friday, PBBM enumerated other government measures to mitigate the effects of the ME conflict that led to the ensuing hikes in the domestic prices of fuel products. According to the Chief Executive, his administration is closely coordinating with Congress to grant him temporary authority to slash excise taxes on petroleum products if global oil prices reach $80 per barrel. It is also pushing for amendments to the Biofuels Act of 2006 to allow the use of more affordable bioethanol and is closely monitoring prices to prevent hoarding and profiteering.

Finance Secretary Frederick Go earlier admitted excise tax option might be done if Dubai oil exceeds $80 per barrel and stays at that level for a certain period of time.

On presidential cue, pro-administration House lawmakers convened last Monday a special briefing to gather data and assessments from government agencies before formal deliberations begin on the measures. Data presented during the special House briefing showed fuel-related taxes generate an average of about P276 billion annually, including P160 billion in excise taxes and P116 billion in VAT collections.

Yesterday, the House ways and means committee approved at the end of its first full-blown public hearing a substitute bill authorizing President Marcos to suspend or reduce excise taxes on petroleum products. The substitute measure – House Bill (HB) No. 8292 – consolidates 15 bills and two joint resolutions seeking to grant “temporary authority” to suspend fuel excise taxes during national or global economic emergencies such as this escalating ME situation. One of the House bills was authored by presidential son, Ilocos Norte Rep. Ferdinand Alexander “Sandro” Marcos.

House ways and means committee chairman Marikina City Rep. Miro Quimbo declared the substitute bill approved. This will immediately go up for plenary debate at the floor sessions for second reading when they resume sessions today. “We have to fast-track this. We’re waiting for the presidential certification so we can actually approve it as soon as possible,” Quimbo pointed out.

The Senate ways and means committee and the Senate committee on energy, both chaired by Sen. Pia Cayetano, will hold a joint public hearing today on the counterpart bills seeking automatic suspension of excise tax on imported crude and refined oil products and grant of emergency powers for the President in times of oil crisis.

There has been so much hemming and hawing over possible remedial measures to cushion the impact of the oil price shocks amid the worsening tensions in the Middle East (ME). Official statements from Malacañang Palace all the way to Congress have been spewing urgent calls advocating to cut, if not suspend, the collection of excise taxes on imported crude oil.

And the other populist proposed remedy is to waive the 12 percent value added tax (VAT) on the sale of gasoline, diesel and other refined crude oil products. The same proposal gets a strong push from public transport groups like jeepney drivers and operators pressing for at least P2 fare increase effective immediately. They have been groaning over the more than P1 per liter price increases long before the ME conflict erupted.

Global prices of crude oil already breached $110 per barrel following the supply disruption of shipments from the strife-torn ME. Now entering its second week, the military attacks and counter attacks between the United States-Israel against Iran since Feb. 28 expanded to other parts of the oil-producing Gulf states.

At a press conference on March 3, President Ferdinand “Bongbong” Marcos Jr. (PBBM) disclosed he is eyeing “special powers” from Congress to lower excise tax on fuel to cushion the impact on consumer prices due the escalating global tension. “So, I will discuss it with the leadership of Congress to see if it’s going to be an emergency measure. It is not going to be a permanent measure. It will be something that we will dispose of as soon as the crisis is over,” PBBM cited.

Last Friday, PBBM enumerated other government measures to mitigate the effects of the ME conflict that led to the ensuing hikes in the domestic prices of fuel products. According to the Chief Executive, his administration is closely coordinating with Congress to grant him temporary authority to slash excise taxes on petroleum products if global oil prices reach $80 per barrel. It is also pushing for amendments to the Biofuels Act of 2006 to allow the use of more affordable bioethanol and is closely monitoring prices to prevent hoarding and profiteering.

Finance Secretary Frederick Go earlier admitted excise tax option might be done if Dubai oil exceeds $80 per barrel and stays at that level for a certain period of time.

On presidential cue, pro-administration House lawmakers convened last Monday a special briefing to gather data and assessments from government agencies before formal deliberations begin on the measures. Data presented during the special House briefing showed fuel-related taxes generate an average of about P276 billion annually, including P160 billion in excise taxes and P116 billion in VAT collections.

Yesterday, the House ways and means committee approved at the end of its first full-blown public hearing a substitute bill authorizing President Marcos to suspend or reduce excise taxes on petroleum products. The substitute measure – House Bill (HB) No. 8292 – consolidates 15 bills and two joint resolutions seeking to grant “temporary authority” to suspend fuel excise taxes during national or global economic emergencies such as this escalating ME situation. One of the House bills was authored by presidential son, Ilocos Norte Rep. Ferdinand Alexander “Sandro” Marcos.

House ways and means committee chairman Marikina City Rep. Miro Quimbo declared the substitute bill approved. This will immediately go up for plenary debate at the floor sessions for second reading when they resume sessions today. “We have to fast-track this. We’re waiting for the presidential certification so we can actually approve it as soon as possible,” Quimbo pointed out.

The Senate ways and means committee and the Senate committee on energy, both chaired by Sen. Pia Cayetano, will hold a joint public hearing today on the counterpart bills seeking automatic suspension of excise tax on imported crude and refined oil products and grant of emergency powers for the President in times of oil crisis.

Marcos economic managers led by the Department of Economy, Planning and Development (DepDev) warned that escalating crude oil prices could push inflation beyond the government’s target range if the trend continues. From economic simulations, inflation is projected to rise to between 4.5 percent to a more severe scenario of as high as 6.3 percent to 7.5 percent.

A former party-list congresswoman, Department of Energy (DOE) Secretary Sharon Garin, called upon her former House colleagues to consider fuel excise tax cut while the government will provide “ayuda” or direct subsidies to seriously affected sectors like public transport utilities, farmers and fisherfolk.

Earlier, the Department of Transportation (DOTr) announced it is readying P3.5 billion in subsidies to provide free rides to commuters and to shoulder part of the fuel expenses of public utility vehicles (PUVs). According to the DOTr, the agency has requested the Department of Budget and Management (DBM) to release the P2.5 billion in fuel subsidy unspent from the previous year’s Congress-approved budget.

All these response measures look fine and reassuring. Offhand, however, what boggles the mind is the seeming dilly-dallying on supposed set of measures of emergency nature. Instead of more effective public service, national and local government agencies resorted to four-day workweek. Why not work-from-home as done during the pandemic?

In crisis, time is of the essence for quick actions with extreme urgency.

Our lawmakers are set to go on another month-long recess scheduled for the Lenten observance. Under the approved legislative calendar of the 20th Congress, the Senate and House of Representatives will adjourn for Holy Week break starting March 18. They will resume sessions on May 4.

Actually, if the needed action is to suspend collection of excise tax and/or removing the 12 percent VAT on refined oil products, PBBM could simply issue an Executive Order for immediate implementation. This is in the exercise of the President’s constitutional powers to amend tariff and tax laws whenever Congress is not in session. Boom, problem solved?

Imagine all the public funds from all these taxes we’ve been paying lost to corruption. If these grafters just moderated their greed, we won’t be in this crisis situation.